Comment by ethbr1
14 days ago
Protectionism, like industry subsidies, is a double-edged sword.
- On the one hand, as SE Asia is intimately familiar with, it can create space to create globally competitive industries.
- On the other hand, it can also remove the incentive for local industries to invest and become technically competitive.
IMHO, what I'd like to see would be a stricter link between protection measures and R&D investment.
If an industry is protected, then it is required to prove it's improving itself + limit returns to shareholders.
E.g. steadily increasing CAFE fuel efficiency standards, requirements to demonstrate decreasing costs of production (lumber and/or steel), etc.
Too often, protection measures are implemented, the excess benefits are skimmed and go directly to shareholders, and the company doesn't increase its global competitiveness (e.g. US Steel).
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